Process: 227/2016-T

Date: October 11, 2016

Tax Type: Selo

Source: Original CAAD Decision

Summary

This arbitration case (Process 227/2016-T) concerns the legality of Stamp Tax (Imposto do Selo - IS) assessments on a property classified as building land (terrenos para construção). Following the entry into force of Law 55-A/2012 of October 29, which introduced IS on ownership of urban properties with residential use valued at €1 million or more, the Tax Authority issued two assessments: €9,193.25 (November 7, 2012) and €19,075.99 (March 21, 2013) on the taxpayer's half-share ownership of building land. The claimant challenged these assessments before CAAD, arguing that: (1) building land does not qualify as residential use property under item 28.1 of the General Stamp Tax Table (TGIS); (2) the tax violates constitutional principles of equality and contributory capacity (Articles 13, 103, and 104 of the Portuguese Constitution); (3) the tax violates the principle of progressivity; and (4) the second assessment constitutes illegal duplication of the first. The taxpayer followed the proper administrative procedure by filing gracious complaints, hierarchical appeals to the Director of Services, and ultimately requesting tax arbitration under the Legal Regime for Tax Arbitration (RJAT). The case raises fundamental questions about the scope of Law 55-A/2012, specifically whether the legislature intended to tax undeveloped building land or only completed residential properties, and whether the transitional provisions for 2012 were correctly applied by the Tax Authority.

Full Decision

ARBITRAL DECISION

I. REPORT

1.1. A…, holder of taxpayer identification number…, resident in … –…– …, in … (…-…), which falls within the geographical competence of the Tax Office of …, notified of the dismissal decision, issued by dispatch of 7.12.2015 by Her Excellency the Director of Services of the Municipal Tax on Onerous Property Transfers, Stamp Tax, Single Circulation Tax and Special Contributions, which was issued on the hierarchical appeal no. …2013…, filed against the dismissal decision of the administrative complaint lodged against the Stamp Tax (IS) assessment of 7.11.2012, relating to the property, in the proportion of ½, of the aforementioned property, issued following the entry into force of Law no. 55-A/2012, of 29 October, in the total amount of € 9,193.25, as well as the dismissal decision, issued by dispatch of 7.12.2015 by Her Excellency the Director of Services of the Municipal Tax on Onerous Property Transfers, Stamp Tax, Single Circulation Tax and Special Contributions, which was issued on the hierarchical appeal no. …2013…, filed against the dismissal decision of the administrative complaint lodged against the Stamp Tax (IS) assessment of 21.03.2013, relating to the property, in the proportion of ½, of the property situated in the extinct parish of … (current Union of parishes of … and …), municipality of …, registered in the property register under no. … (corresponding to the extinct article …) of the same parish, for the year 2012, in the total amount of € 19,075.99, came, pursuant to the provisions of articles 2, no. 1, letter a), 5, no. 2, letters a) and b), 6, no. 1, 10, no. 1, letter a), in fine, and no. 2, all of the Legal Regime for Tax Arbitration (RJAT), to REQUEST THE CONSTITUTION OF A SINGULAR ARBITRAL TRIBUNAL for the purpose of declaring the illegality of the aforementioned assessments, as well as of the aforesaid dismissal decisions of the hierarchical appeals.

1.2. The request for arbitral pronouncement aims at the annulment of the dismissal decisions of the hierarchical appeals identified above, in which the declaration of illegality of the IS assessments of 7.11.2012 and 21.03.2013 was requested, respectively in the amounts of € 9,193.25 and € 19,075.99, relating to the property, in the proportion of ½ each, on the urban property, composed of a plot of land for construction, situated in the extinct parish of … (current Union of parishes of … and … -…), municipality of …, registered in the property register under no. … (corresponding to the extinct article …) of that parish, the first issued following the entry into force of Law no. 55-A/2012, of 29 October, and the second relating to the year 2012, on the basis of the provision in letter a) of article 99 of the Tax Procedure and Process Code (CPPT).

1.3. The TAX AUTHORITY AND CUSTOMS ADMINISTRATION (AT) is the Respondent.

1.4. The request for the constitution of the arbitral tribunal was accepted by His Excellency the President of CAAD and automatically notified to the Tax Authority and Customs Administration on 28-04-2016.

1.4. Given that the Claimant did not proceed to appoint an arbitrator, pursuant to the provision in article 6, no. 2, letter a), of the RJAT, the undersigned was designated as arbitrator by the President of the Deontological Council of CAAD, with the appointment being accepted within the legally prescribed timeframe and terms.

1.5. On 15 June 2016, the Parties were duly notified of this designation, and neither manifested intent to refuse the designation of the arbitrator, pursuant to the provision in article 11, no. 1, letters a) and b) of the RJAT, in conjunction with articles 6 and 7 of the Deontological Code.

1.6. In accordance with the provision in letter c), of no. 1, of article 11 of the RJAT, the Collective Arbitral Tribunal was constituted on 30 June 2016.

1.7. In the Arbitral Petition, presented by itself, the Claimant invoked, in summary, the following:

a) Law no. 55-A/2012, of 29 October, came to subject the IS, with respect to resident taxpayers, the ownership, usufruct or the right of superficies of urban properties with "residential use", whose taxable asset value, determined pursuant to the Property Tax Code (IMI), is equal to or greater than € 1,000,000.00;

b) With regard to the subjective scope of the tax as well as the taxable event, article 2, no. 4 of the IS Code, as amended by Law no. 55-A/2012, of 29 October, provides that "In the situations provided for in item no. 28 of the General Table, the taxpayers referred to in article 8 of the IMI Code are liable to the tax", that is, the taxpayers liable to IS are the owners of the properties on 31 December of the year to which the tax relates (cf. article 8, no. 1 of the IMI Code);

c) Notwithstanding the provisions in articles 23, no. 7, 44, no. 5 and 46, no. 5, all of the IS Code, as amended by the identified law, IS is assessed annually in relation to each urban property with taxable asset value equal to or greater than € 1,000,000.00 and paid within the deadlines, terms and conditions of the IMI Code, that is, in two or three installments, depending on the amount of the collection, throughout the year following the year to which it relates, and must be sent to the taxpayer by the tax administration services by the end of the month preceding that of payment (cf. articles 119, no. 1, and 120, no. 1, both of the IMI Code, as amended by the State Budget Law for 2013, approved by Law no. 66-B/2012, of 31 December);

d) For the year 2012, Law no. 55-A/2012, of 29 October, provided, as a transitional provision, that: i) the taxable event would occur on 31 October 2012; ii) the taxpayer would be the owner of the urban property on 31 October 2012; and that iii) the tax administration would assess the tax by the end of November 2012, with the same being paid by 20 December of that year (cf. article 6, no. 1, of Law no. 55-A/2012, of 29 October);

e) With regard to the tax rates to be applied on a transitional basis in the year 2012, letter f) of no. 1 of article 6 of that Law provides that: "The applicable rates are as follows: i) Properties with residential use evaluated pursuant to the IMI Code: 0.5%; ii) Properties with residential use not yet evaluated pursuant to the IMI Code: 0.8%; iii) Urban properties where the taxpayers are not natural persons and are resident in a country, territory or region subject to a clearly more favorable tax regime, listed in the list approved by ministerial regulation of the Minister of Finance: 7.5%.";

f) Following the entry into force of the said Law, the Claimant was notified of the IS assessments sub judice;

g) The Claimant does not accept the assessments in question for the following reasons:

i) the urban property in question is classified as land for construction, and therefore does not fall within the category of urban property with residential use provided in item 28.1 of the TGIS, in conjunction with the transitional provision applicable with respect to the assessment notified in November 2012 [cf. article 6, no. 1, letter f) of Law no. 55-A/2013, of 29 October], and its ownership is not subject to IS;

ii) The IS on the property as defined in item 28.1 of the TGIS and, consequently the assessments sub judice, is manifestly violative of the principles of equality and contributory capacity, provided in articles 13, 103, no. 1 and 104, no. 3, all of the Constitution of the Portuguese Republic (CRP), reason for which it appears unconstitutional;

iii) The IS on the property, as defined in item 28.1 of the TGIS, violates the principle of progressivity provided in articles 103, no. 1 and 104, no. 3, both of the CRP, being, also for that reason, unconstitutional;

iv) The IS assessment of 21.03.2013, in the amount of € 19,075.99, incurs the defect of duplication of collection, insofar as the tax administration proceeds to assess a tax already assessed, through the IS assessment of 07.11.2012, in the amount of € 9,193.25;

v) The IS assessment of 07.11.2012, in the amount of € 9,193.25, incurs the defect of insufficient statement equivalent to lack of statement, since it does not contain the indication of the year to which the assessed tax relates, with only the space referring to the year to which the tax relates containing the mention "Law no. 55-A/2012";

h) In these terms, and in all other applicable law, the present request for the constitution of an arbitral tribunal should be granted and, consequently, the IS assessments sub judice should be annulled, as well as the decisions that were issued on the hierarchical appeals in dispute.

1.8. The Respondent presented a response, in which it presented a defense by objection, alleging, toward the inadmissibility of the request for arbitral pronouncement, in summary, the following:

a) As sustained in the Reports nos. I2015… and I2015…, both issued on 16.11.2015, of the Directorate of Services of the Municipal Tax on Onerous Property Transfers, Stamp Tax, Single Circulation Tax and Special Contributions (DSIMT), urban properties that are land for construction and to which residential use has been assigned within the scope of their respective assessments have the legal nature of properties with residential use, and therefore the acts of assessment of Stamp Tax object of the present request for arbitral pronouncement should be maintained as they constitute the correct interpretation of the applicable law;

b) The reference to properties with residential use contained in item 28 of the IS Code should be understood broadly, encompassing both constructed residential properties and land for construction, already due to the very wording of the rule and the concept used;

c) The legislator does not refer to "properties intended for housing," having opted for the notion of "residential use," an expression that is different and broader whose sense should be found in the need to integrate other realities beyond those identified in art. 6, no. 1 of the IMI Code;

d) Fiscal law considers as an integrating element for the purposes of valuation of land for construction, the value of the implantation area, which varies between 15% and 45% of the value of authorized or planned buildings based on the urbanization and construction project;

e) It cannot be ignored that the license for the realization of urbanistic operations should contain, among other elements, the number of lots and indication of the location area, purpose, implantation area, construction area, number of floors and number of dwellings of each of the lots, with specification of the dwellings intended for controlled-cost housing, when provided, pursuant to letter a) of art. 77 of the Legal Regime for Urbanization and Building (RJUE);

f) Art. 77 of the RJUE contains mandatory specifications for permits for subdivision or urbanization works, as well as for building works;

g) Municipal Master Plans establish the strategy for municipal development, the municipal policy for territorial management and urbanism and other urban policies, integrating and articulating the orientations established by territorial management instruments of national and regional scope;

h) Thus, long before the actual construction of the property, it will be possible to ascertain and determine the use of the land for construction;

i) Item 28 of the TGIS applies to the ownership, usufruct or right of superficies of urban properties with residential use, whose taxable asset value contained in the register, pursuant to the IMI Code, is equal to or greater than € 1,000,000.00, that is, it applies to the value of the property;

j) It is a general and abstract rule, applicable indistinctly to all cases in which the factual and legal requisites are met;

k) The different aptitude of the properties (housing/services/commerce) supports the different treatment, having constituted a choice by the legislator, for political and economic reasons, to exclude from the IS the properties intended for purposes other than residential;

l) Thus, taxation under stamp tax must comply with the criterion of suitability, being applied indistinctly to all holders of properties with residential use with a value greater than € 1,000,000.00, applying to the wealth embodied and manifested in the value of the properties;

m) Based on all the foregoing, the assessments in dispute should be maintained, not suffering from the pointed errors in the factual and legal requisites.

1.10. By dispatch of 07 September 2016, given that no exceptions were invoked and that there is only controversy regarding matters of law, this Tribunal dispensed with holding the meeting provided for in article 18 of the RJAT, in application of the principles of autonomy in the conduct of proceedings, celerity, simplification and procedural informality. It further decided that the proceedings continue with optional written pleadings and set 28 October 2016 as the final deadline for issuing the arbitral decision.

1.11. Neither the Claimant nor the Respondent presented final arguments.

II. PRELIMINARY DECISION ON ADMISSIBILITY

2.1. The present request for the constitution of an arbitral tribunal is made with the cumulation of requests for declaration of illegality of the IS assessment acts, as well as of the dismissal decisions of the hierarchical appeals, all identified above.

2.2. The requisites upon which the cumulation of the identified requests depends are verified in the case in question.

2.3. Indeed, article 3, no. 1 of the RJAT establishes that "The cumulation of requests, even if relating to different acts and the joinder of parties are admissible when the merits of the requests depend essentially on the assessment of the same circumstances of fact and on the interpretation and application of the same principles or rules of law."

2.4. The Claimant is a co-owner of the land with reference to which the IS assessments in question were issued, seeking to have the question of whether the IS provided in item 28.1 of the General Table of Stamp Tax (TGIS) applies to it appreciated.

2.5. Thus, the merits of the requests depend essentially on the assessment of the same circumstances of fact and on the interpretation and application of the same principles and rules of law.

2.6. There is, therefore, an unequivocal identity of facts and the interpretation and application of the same rules of law is at issue.

2.7. The cumulation of requests presented by the Claimant is therefore granted.

2.8. No exceptions were invoked.

2.9. The parties have legal personality and capacity, are legitimate with respect to the request for arbitral pronouncement and are duly represented, pursuant to the provisions of articles 4 and 10 of the RJAT and article 1 of Regulation no. 112-A/2011, of 22 March.

2.10. No procedural defects are verified, and therefore it is necessary to proceed to the merits.

III. MERITS

III.1. MATTERS OF FACT

§1. Proven Facts

The following facts are judged to be proven:

a) The Claimant is a co-owner, in the proportion of ½, of the urban property situated in the extinct parish of … (current Union of parishes of … and …), municipality of …, registered in the property register under no. … (corresponding to the extinct article …), which is composed of a plot of land intended for construction;

b) By virtue of the acquisition, by donation, of the aforementioned property, in 2009 the respective assessment was effected, following which it was assigned the taxable asset value of € 3,677,300.00, subsequently updated to € 3,815,198.75, and currently fixed at € 1,948,190.00, following assessment carried out in 2015;

c) The aforementioned urban property has no construction erected as of the present date;

d) The Claimant was notified of the IS assessments better identified in the preamble, with the amount of each of them being € 9,193.25 and € 19,075.99, as a result of the application of the rates of 0.5% and 1% provided, respectively, in article 6, no. 1, letter f), i) of Law no. 55-A/2012, of 29 October, and in item 28.1 – "For property with residential use" – of the General Table of Stamp Tax (TGIS), attached to the Stamp Tax Code (IS Code), as amended by the said law, materialized, respectively, in the collection documents no. 2012 … and no. 2013 …, the latter for payment of the first installment;

e) In the case of the assessment relating to the year 2012, in the amount of € 19,075.99, with its payment being phased in 3 installments of € 6,358.66, the Claimant was equally notified of collection documents no. 2013… and no. 2013…, for payment of the second and third installments, respectively, as referred to in the decision issued on the hierarchical appeal no. …2013…;

f) In view of the notification of the assessment issued following Law no. 55-A/2012, of 29 October, identified above, and because the Claimant did not accept it, the Claimant filed the respective administrative complaint, to which was assigned the number …2013…;

g) By office no. …, of 22.05.2013, of the Tax Office of …, the Claimant was notified of the decision dismissing the administrative complaint filed, after having been notified, by office no. …, of 22.04.2013, of the respective draft decision;

h) Not accepting that decision, the Claimant filed against it a hierarchical appeal;

i) By office no. …, of 13.01.2016, of the Tax Office of …, the Claimant was notified of the decision dismissing the hierarchical appeal filed;

j) In view of the notification of the assessment relating to the year 2012, mentioned above better identified, and because the Claimant did not accept it, the Claimant filed the respective administrative complaint, to which was assigned the number …2013…;

k) By office no. …, of 28.08.2013, of the Tax Office of …, the Claimant was notified of the decision dismissing the administrative complaint filed, after having been notified of the respective draft decision;

l) Not accepting that decision, the Claimant filed against it a hierarchical appeal;

m) By office no. …, of 13.01.2016, of the Tax Office of …, the Claimant was notified of the decision dismissing the hierarchical appeal filed;

§2. Facts Not Proven

With significance for the decision, there are no essential facts not proven.

§3. Reasoning Regarding Matters of Fact

With regard to the proven matters of fact, the Tribunal's conviction was based on the free assessment of the positions assumed by the Parties regarding the facts and on the content of the documents attached to the record, not contested by the Parties.

III.2. MATTERS OF LAW

§1. Questions to be Decided

Once the relevant facts are established, it is verified that exclusively matters of law are at issue in the present proceedings.

It is incumbent upon the Tribunal to assess, as a main matter, the legality of the acts of assessment of stamp tax in dispute and, consequently, the legality of the dismissal decisions of the hierarchical appeals identified above.

As an incidental matter, and should it prove necessary for the decision of the merits of the case, this Tribunal should also assess the constitutionality of the rule contained in Item 28.1 of the TGIS.

§2. Application of Law to the Case Sub Judice

Article 4 of Law no. 55-A/2012, of 29 October, which entered into force on 30 October following, added an item to the TGIS then in force, with the following wording:

"28 - Ownership, usufruct or right of superficies of urban properties whose taxable asset value contained in the register, pursuant to the Municipal Property Tax Code (IMI Code), is equal to or greater than € 1,000,000 - on the taxable asset value used for the purposes of IMI:

• 28.1 - For property with residential use - 1%;

• 28.2 - For property, when the taxpayers are not natural persons and are resident in a country, territory or region subject to a clearly more favorable tax regime, listed in the list approved by ministerial regulation of the Minister of Finance - 7.5%."

Subsequently, article 194 of Law no. 83-C/2013, of 31 December, introduced a new wording to item 28 of the TGIS, which came to include land for construction, in the following terms:

"28.1 - For residential property or for land for construction whose authorized or planned building is for housing, pursuant to the provisions of the IMI Code - 1%."

The amendment introduced by Law no. 83-C/2013, of 31 December, entered into force only on 01.01.2014, not being applicable to the tax periods to which the assessments that are the object of the present request for arbitral pronouncement relate (2012 and 2013).

Now, the Stamp Tax Code (IS Code) and the respective General Table, as amended by Law no. 55-A/2012, of 29 October, do not clarify the meaning of the expression "property with residential use."

Article 67, no. 2 of the IS Code, added by Law no. 55-A/2012, of 29 October, provides that "[t]o matters not regulated in this Code relating to item no. 28 of the General Table shall apply, subsidiarily, the provisions of the IMI Code."

The legislator, in no. 1 of article 2 of the IMI Code, adopts the following concept of property:

"For the purposes of this Code, property is any parcel of land, including waters, plantations, buildings and constructions of any nature incorporated into or based on it, with a character of permanence, provided that it forms part of the assets of a natural or legal person and, under normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the aforesaid circumstances, endowed with economic autonomy in relation to the land where they are located, although situated on a parcel of land that constitutes an integral part of different assets or does not have a patrimonial nature."

No. 1 of article 6 of the IMI Code enumerates the various types of urban properties, according to their respective use: residential; commercial, industrial or for services; land for construction; others.

From the classification adopted by the legislator in article 6 of the IMI Code, it follows the distinction between (i) constructed properties, which may be assigned to housing, commerce, industry or services, with this assignment being determined based on the respective licensing or, in the absence of a license, the normal destination of the property (article 6, no. 2, of the IMI Code) and (ii) land for construction, in accordance with the definition contained in no. 3 of article 6 of the IMI Code.

Thus, the reasoning expressed by the STA in its Decision of 23/04/2014, in proc. 0271/14, is subscribed to, when it states that "[h]aving the legislator not defined the concept of "properties (urban) with residential use," and resulting from article 6 of the IMI Code – subsidiarily applicable to Stamp Tax provided in the new item no. 28 of the General Table – a clear distinction between "residential urban properties" and "land for construction," the latter cannot be considered, for the purposes of the incidence of Stamp Tax (Item 28.1 of the TGIS, as amended by Law no. 55-A/2012, of 29 October), as urban properties with residential use."

In the same sense, this Tribunal accepts the understanding, expressed in the cited Decision of the STA, according to which "[t]he fact that it may be considered that in determining the taxable asset value of urban properties classified as land for construction, the use that the building authorized or planned for it will have should be taken into account for determining the respective value of the implantation area (cf. nos. 1 and 2 of article 45 of the IMI Code) does not determine that land for construction may be classified as "properties with residential use," because "residential use" always appears in the IMI Code referred to "buildings" or "constructions," existing, authorized or planned, because only these can be inhabited, which does not occur in the case of land for construction, which does not have, in itself, conditions for such, not being capable of being used for housing unless and until a construction authorized and planned for it is built on it (but in that case it will no longer be "land for construction" but another type of urban property – "residential," "commercial, industrial or for services" or "other" – article 6 of the IMI Code)."

An interpretation such as that adopted by the Respondent, according to which land for construction is encompassed by the expression "property with residential use," has no minimum correspondence in the letter of the law, leading to a legal solution that constitutes a true analogical application of the rule contained in article 1, no. 1, of the Stamp Tax Code (IS Code) and Item 28.1 of the TGIS, in non-conformity with the law (article 11, no. 4, of the General Tax Law), with the principle of typicality of tax law, inherent in the principle of tax legality (article 103, no. 2, and 165, no. 1, letter i), of the Constitution of the Portuguese Republic) and with the principle of legal certainty and protection of the citizens' confidence.

Given that it is possible to interpret item 28.1 of the TGIS in conformity with the Constitution, it is, however, to be rejected the judgment of the unconstitutionality of the rule contained therein.

In this case, an interpretation consistent with the Constitution implies the non-subjection to Stamp Tax, by application of Item 28.1 of the TGIS, of the land for construction identified in the record, with respect to the years 2012 and 2013.

In view of the foregoing, the assessment of the defects of duplication of collection and insufficiency of statement, alleged by the Claimant, is dispensed with.

IV. DECISION

In these terms, and with the grounds set forth, this Tribunal decides to judge the request for arbitral pronouncement to be well-founded and, consequently, annul the stamp tax assessments sub judice and annul the decisions dismissing the hierarchical appeals in dispute.

V. VALUE OF THE PROCEEDINGS

In accordance with the provision in article 306, no. 2, of the CPC, 97-A, no. 1, letter a), of the CPPT and 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at € 28,269.24.

VI. COSTS

Pursuant to article 22, no. 4, of the RJAT, the amount of costs is fixed at € 1,530.00, in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Respondent.

Notify.

Lisbon, 11 October 2016

The Arbitrator

(Paulo Nogueira da Costa)

Frequently Asked Questions

Automatically Created

Is Stamp Tax (Imposto do Selo) applicable to building land (terrenos para construção) under Verba 28.1 of the TGIS?
No, Stamp Tax under Verba 28.1 of the TGIS is not applicable to building land (terrenos para construção). Law 55-A/2012 specifically targets urban properties with 'residential use' (uso habitacional) valued at €1 million or more. Building land lacks the essential characteristic of residential use since it has no constructed habitation and cannot be used for residential purposes in its current state. The classification of property for IMI purposes determines its nature, and land designated for construction is categorically distinct from completed residential buildings. The Tax Authority's attempt to apply the residential property stamp tax to undeveloped building plots represents an expansive interpretation not supported by the statutory language.
What was the legal basis for challenging the Stamp Tax assessments introduced by Law 55-A/2012?
The legal basis for challenging these Stamp Tax assessments includes: (1) Article 99(a) of the Tax Procedure and Process Code (CPPT) for illegality of the tax acts; (2) violation of constitutional principles of equality (Article 13 CRP) and contributory capacity (Articles 103(1) and 104(3) CRP); (3) violation of the principle of tax progressivity; (4) illegal duplication of taxation (the March 2013 assessment taxing the same property already assessed in November 2012 for the 2012 tax year); and (5) incorrect application of the transitional provisions in Article 6 of Law 55-A/2012, which should only apply to properties with residential use. The taxpayer properly exhausted administrative remedies before seeking arbitration.
Can taxpayers request arbitration at CAAD to contest Stamp Tax liquidations on urban building plots?
Yes, taxpayers can request arbitration at CAAD (Centro de Arbitragem Administrativa) to contest Stamp Tax liquidations on urban building plots. Under the Legal Regime for Tax Arbitration (RJAT), specifically Articles 2(1)(a) and 10(1)(a), taxpayers may challenge the legality of tax assessments and dismissal decisions of hierarchical appeals. The procedure requires: (1) filing a gracious complaint (reclamação graciosa) with the Tax Authority; (2) if dismissed, filing a hierarchical appeal to the Director of Services; (3) upon dismissal of the hierarchical appeal, requesting constitution of an arbitral tribunal at CAAD within the statutory deadline. This case demonstrates the complete procedural path from initial assessment through administrative remedies to arbitration.
How does the proportional ownership (½) of a property affect Stamp Tax liability under Portuguese law?
Proportional ownership of ½ of a property affects Stamp Tax liability by reducing the taxpayer's share of the total tax burden proportionally. Under Article 2(4) of the IS Code, as amended by Law 55-A/2012, the taxpayers liable are those identified in Article 8 of the IMI Code—the property owners on December 31 of the relevant year (or October 31, 2012 for the transitional provision). When multiple owners hold a property as co-owners, each is liable for IS based on their ownership percentage. Thus, if the total IS on a property is €18,386.50, a ½ owner would be liable for €9,193.25. The proportional assessment applies to each co-owner's share independently, and each co-owner has separate standing to challenge their proportional assessment.
What is the procedure for filing a hierarchical appeal against a denied gracious complaint on Stamp Tax?
The procedure for filing a hierarchical appeal against a denied gracious complaint on Stamp Tax follows Article 66 and following of the CPPT. After the Tax Authority dismisses the gracious complaint (reclamação graciosa), the taxpayer must: (1) file a hierarchical appeal (recurso hierárquico) within 30 days of notification of the dismissal decision; (2) address the appeal to the superior hierarchical authority—in this case, the Director of Services of Municipal Tax on Onerous Property Transfers, Stamp Tax, Single Circulation Tax and Special Contributions; (3) state the grounds for illegality and request annulment of the contested acts; (4) upon dismissal of the hierarchical appeal, the taxpayer may then pursue judicial review or tax arbitration at CAAD under the RJAT. The hierarchical appeal must be filed before accessing arbitration, as it is a mandatory prerequisite for challenging tax assessments.